Part 7
Passage-money, after deducting the charge for £ _s._ _d._ maintenance 110,508 4 6 Stewards’ fees 1,677 16 8 Freight and parcels 72,894 9 9 Conveyance of mails 112,262 10 0 ----------------- £297,343 0 11 -----------------
The company has not thought it prudent to pay a larger dividend than 8 per cent. per annum to the shareholders.
In addition to the dividend, the before-mentioned reserved funds have accrued from the annual profits, viz.:--
Depreciation £175,183 Insurance 137,162 Repairing 74,079 -------- £386,424 --------
Beyond 2½ per cent. on the freight and passage-money, paid to the directors under the head of management; and 5 per cent. on the profit balance on closing the account, paid on the same account.
These charges of 2½ per cent. on the freight and passage-money, and 5 per cent. on the balance, include, beyond all other expenses of management, allowance to the managing directors, for conducting the affairs of the company, to the net amount of from £15,000 to 16,000 per annum.
This remuneration is paid to them under the deed of settlement, and has probably secured to the shareholders an efficiency and economy in the general arrangements which have contributed greatly to the success of the concern; at the same time it may be doubted whether, in estimating the profits of the company, the amount paid to the directors may not be considered (beyond the usual compensation for such services) as part of the general profits, rather than as a charge of management.
The principles on which the reserved funds have been laid aside appear fair and reasonable.
The insurance is at a rate of 5 per cent. on the first cost of the vessels employed, after deducting the amount already carried to depreciation account; out of which amount the premiums for insurance at Lloyd’s are paid on such assurances as are effected there, the balance being added to the insurance fund. The portion of the insurance actually effected is at rather a higher rate than the 5 per cent. It would not be fair, therefore, to include any portion of this reserved fund in an estimate of the company’s profits as shipowners or mail contractors. It belongs fairly to them in their character of insurers, as, if they had insured the full value of their property, it would have been paid to underwriters.
The depreciation fund is calculated at a rate of 5 per cent. per annum on the first cost of the vessels, after deducting the amount previously carried to the same account.
The repair fund is at the rate of 10 per cent. per annum, calculated on the same amount as the preceding; and it will be seen that the sum thus reserved for the last six months was £37,633 13_s._ 3_d._, which did not provide for the actual expenditure of £39,630 6_s._ 3_d._
So far, therefore, as the affairs of the company have hitherto proceeded, the amount paid to them under the contract would not appear to have exceeded a reasonable remuneration for the services performed, on the principles before stated.
Second: The comparative advantages which might result from the employment of her Majesty’s vessels, instead of contract vessels, for the performance of those duties, appears to be a question of somewhat difficult solution.
The present mode of keeping the accounts of the navy, and the commixture of expenditure for the steam and other departments in the dockyards and public offices, must render it exceedingly difficult to ascertain the cost of any separate branch of service.
Supposing, however, that the financial comparison could be made, yet there are many other important elements in the consideration of the subject.
For the rapid and secure performance of the public mail duty, no branch of the mercantile marine is so well prepared as her Majesty’s naval department. But by the employment of her Majesty’s vessels, light merchandise could not be conveyed; the habits and comforts of the passengers could never be so well provided for as by persons paid for such duties; and as regards the troublesome details of carrying passengers, freight, and merchandise, the war steamer must be less adapted than the merchant vessel.
It must be recollected, also, that a sufficient number of vessels must be fitted up, equipped, provisioned, stored, and specially and exclusively adapted to and employed upon this service; and that fresh arrangements, depôts, and agencies along the lines of route would be required; the preparation for such services would therefore be necessarily attended with an expense which years of any probable saving could scarcely defray.
Third: The question then arises whether, in the continued employment of the Peninsular and Oriental Steam Company’s vessels, considering the actual condition and the established profits and credit of the company, owing in some measure to the existing contract, some modification of the terms, for the advantage of the public, may not be fairly expected.
With a view to the consideration of this question, the following facts are submitted.
The general transactions of the last half-year, the best period for judging clearly the present operation of the company, furnish the following points:
The gross profits, after deducting 2½ per cent. for £ _s._ _d._ management, and 5 per cent. for repairs, and 2½ per cent. for insurance, amount to 62,629 11 2
From which is deducted 2½ per cent, for depreciation 16,915 0 0 -------------- Leaving, beyond the amount deducted for directors £45,714 11 2 --------------
The dividend to the shareholders, at the rate of 4 per cent. for six months, or 8 per cent. per annum, on the original capital of £973,378, amounted to £38,933, leaving a surplus balance of about £6,781, to be carried to the next account.
If even the amount paid to the directors from the 2½ per cent. (deducted for charges of management, being for a half year, £8,248 10s. 9d.), were added to the surplus balance of £6,781, and a dividend paid to the proprietors at the rate of 10 per cent., the scale suggested by their lordships, a residue would only be left of about £5,296; from which residue the expenses of management, and ordinary salaries for managing directors, would have to be defrayed.
Their lordships will thus have before them the means of considering what modification of the terms of the contract the present and prospective state of the profits of the company would appear to justify; or whether it would be expedient to adopt such modification to the varying profits of the company in the terms proposed by it; viz., that when the financial position of the company, with respect to such mail services, shall be such as, after making the customary allowances for the repairs, &c., a maximum dividend of 10 per cent. can be realised to the shareholders, any surplus over and above such maximum dividend shall be placed to the credit of the Government.
(Signed) A. ELLICE, WM. H. BOND.
APPENDIX.
_No. 1.--Memorandum of Contracts with Government for the Conveyance of Her Majesty’s Mails by the Peninsular and Oriental Steam Navigation Company._
+--------+---------+--------+----------- |Distance| | | STATION. | per | Annual | Annual | Per Mile. |Voyage. |Distance.| Sum. | ----------------------------------+--------+---------+--------+----------- 1. Southampton to Vigo, Oporto, | | | £ | Lisbon, Cadiz, and Gibraltar;| | | | three times a month, say on | | | | the 7th, 17th, and 27th | 2,400 | 86,400 | 20,500 | 4/8¾ | | | |nearly 4/9 2. Southampton to Malta and | | | | Alexandria, once a month, on | | | | the 20th | 6,084 | 73,008 | 28,500 | 7/9½ | | | |nearly ¾ 3. Southampton to Malta and | | | | Alexandria (bi-monthly) on | | | | the 3rd | 6,084 | 73,008 | 15,525 | 4/3 4. Calcutta to Madras, Point de | | | | Galle, Aden and Suez, and | | | | Point de Galle to Penang, | | | | Singapore, and Hong Kong, | | | | once a month | 15,590 | 187,080 |160,000 | 17/1¼ +--------+---------+--------+---------- | | 419,496 |224,525 | 10/8¼ | | | |nearly ½ ----------------------------------+--------+---------+--------+----------
London, 8th June, 1848.
_No. 2--List of the Steam Ships belonging to the Peninsular and Oriental Steam Navigation Company.--June 10, 1848._
----+-------------+----------------------------------------------+---------+---------+ | | REGISTER TONNAGE. | | | | +---------------+----------------+-------------+ | + | | | | | | | | | | | | | | | | | | | | | | | | | | | | No. | NAME of the | | | | | | | VESSEL. | Ship. | Engine Room. | Old | Horse | | | | | | Measurement.| Power. | Cost. | | | | | | | | ----+-------------+---------------+----------------+-------------+---------+---------+ | | New Measurement. | | | £ | 1 | Bentinck | 941-50/100 | 1,032-81/100 | 1,702-20/94 | 520 | 89,000| 2 | Precursor |1,133-3/10 | 684 | 1,640 | 460 | 63,000| 3 |*Haddington |1,166-84/100 | 480-60/100 | 1,303-13/94 | 450 | 61,500| 4 | Oriental |1,103-5/10 | 684 | 1,303-20/94 | 420 | 78,000| 5 | India | 501-1750/7500| 369-1750/7500| 755-74/94 | 350 | 10,500| | | | | | | | 6 | Achilles | 586-79/100 | 405-36/100 | 853-78/94 | 430 | 26,500| 7 |*Pottinger | 934-9/10 | 467 | 1,225 | 450 | 66,000| 8 |*Pekin | 759-24/100 | 423-9/100 | 1,000 | 400 | 46,000| 9 | Lady M. Wood| 296-51/100 | 256-59/100 | 503-20/94 | 260 | 31,500| 10 | Braganza | 570 | 284 | 707-70/94 | 264 | 21,100| 11 |*Canton | 218-35/100 | 170 | 387-27/94 | | 14,000| 12 | Hindostan | 971-6/10 | 1,046-6/10 | 1,552-39/94 | 520 | 88,000| | | | | | | | 13 |*Indus | 927-3/10 | 458-9/10 | 1,251-5/94 | 450 | 62,000| 14 |*Ripon |1,167-8/10 | 458 | 1,394-39/94 | 450 | 66,000| 15 |*Ariel | 443-8/10 | 265 | 821-7/94 | 300 | 38,500| 16 |*Erin | 532-6/10 | 265 | 810 | 280 | 35,000| | | | | | | | 17 |*Euxine | 729-407/3500 | 435-2065/3500| 1,039-67/94 | 400 | 43,500| 18 |*Sultan | 728-79/100 | 361-57/100 | 990-85/94 | 400 | 38,500| 19 | Tagus | 497 285| | 709-88/94 | 286 | 28,000| | | | | | | | 20 |*Pacha | 302-53/100 | 245-88/100 | 517-74/94 | 210 | 16,000| 21 | Iberia | 301-9/10 | 213-8/10 | 520 | 190 | 22,000| 22 | Jupiter | 288 | 255 | 437-9/94 | 210 | 15,500| | | | | | | | 23 | Montrose | 283-4/10 | 322 | 596 | 260 | 18,500| 24 |*Madrid | 315-1/10 | 163-6/10 | 446-8/94 | 140 | 17,000| 25 |*Malta | 776-82/100 | 440-64/100 | 1,225 | 450 | 57,500| 26 | Bombay | .... | .... | 1,209-43/94 | 400 | 58,000| 27 | Ganges | .... | .... | 1,209-43/94 | 400 | 58,000| 28 | Vestis | .... | .... | 905-86/94 | 370 | 47,000| +-------------+---------+---------+ |27,017-70/94 | 9,870 |1,220,500| +=============+=========+=========+ ----+-------------+------------------------------------------+-----------------+-----+ | | CREW. | NATIVE CREW. | | | +-----+---------+------+-------------------+------+-----+----+ | | | | | | Engineering | | | | | | | | | | | Department. | | | | | | | | | | +-------+-----+ | | | | | | | | Mates, |Stew- | | | | | | | | No. | NAME of the | |Surgeons,| ards | | | | | | | | | VESSEL. | |Pursers, | and | |Fire-| | | | | | | |Cap- | and |SERV- |ENGIN- | men,| SEA-|SERV- |FIRE-|SEA-|TOTAL| | |tain.| CLERKS. |ANTS. | EERS. | &C. | MEN.|ANTS. |MEN. |MEN.|CREW.| ----+-------------+-----+---------+------+-------+-----+-----+------+-----+----+-----+ | | | | | | | | | | | | 1 | Bentinck | 1 | 7 | 21 | 5 | 4 | 23 | 10 | 67 | 39 | 181| 2 | Precursor | 1 | 7 | 25 | 5 | 9 | 28 | 8 | 60 | 28 | 171| 3 |*Haddington | 1 | 7 | 27 | 5 | 9 | 28 | 10 | 60 | 30 | 177| 4 | Oriental | 1 | 5 | 7 | 3 | 8 | 31 | ... | ... |... | 55| 5 | India | ... | 1 | ... | ... | ... | ... | ... | ... |... | 1| | | | | | | | | | | | | 6 | Achilles | 1 | 5 | 6 | 4 | 12 | 23 | ... | ... |... | 51| 7 |*Pottinger | 1 | 6 | 11 | 4 | 6 | 17 | 30 | 60 | 43 | 178| 8 |*Pekin | 1 | 6 | 10 | 5 | 7 | 14 | 7 | 45 | 41 | 136| 9 | Lady M. Wood| 1 | 5 | 4 | 4 | 3 | 9 | 8 | 26 | 29 | 89| 10 | Braganza | 1 | 5 | 9 | 4 | 3 | 5 | 4 | 31 | 30 | 92| 11 |*Canton | 1 | 2 | 3 | 2 | 6 | 12 | ... | ... |... | 26| 12 | Hindostan | 1 | 7 | 28 | 4 | 24 | 27 | ... | ... |... | 91| | | | | | | | | | | | | 13 |*Indus | 1 | 7 | 28 | 4 | 24 | 27 | ... | ... |... | 91| 14 |*Ripon | 1 | 7 | 31 | 4 | 23 | 25 | ... | ... |... | 91| 15 |*Ariel | 1 | 5 | 13 | 3 | 12 | 19 | ... | ... |... | 53| 16 |*Erin | 1 | 5 | 12 | 3 | 13 | 8 | ... | ... |... | 52| | | | | | | | | | | | | 17 |*Euxine | 1 | 6 | 15 | 4 | 18 | 22 | ... | ... |... | 66| 18 |*Sultan | 1 | 6 | 15 | 4 | 18 | 22 | ... | ... |... | 66| 19 | Tagus | 1 | 5 | 14 | 3 | 12 | 17 | ... | ... |... | 52| | | | | | | | | | | | | 20 |*Pacha | 1 | 3 | 13 | 3 | 8 | 15 | ... | ... |... | 43| 21 | Iberia | 1 | 3 | 12 | 3 | 9 | 13 | ... | ... |... | 41| 22 | Jupiter | 1 | 3 | 11 | 2 | 9 | 12 | ... | ... |... | 38| | | | | | | | | | | | | 23 | Montrose | 1 | 3 | 10 | 2 | 10 | 14 | ... | ... |... | 40| 24 |*Madrid | 1 | 2 | 11 | 2 | 9 | 13 | ... | ... |... | 39| 25 |*Malta | ... | ... | ... | ... | ... | ... | ... | ... |... | ... | 26 | Bombay | ... | ... | ... | ... | ... | ... | ... | ... |... | ... | 27 | Ganges | ... | ... | ... | ... | ... | ... | ... | ... |... | ... | 28 | Vestis | ... | ... | ... | ... | ... | ... | ... | ... |... | ... | +-----+---------+------+-------+-----+-----+------+-----+----+-----+ | 23 | 119 | 340 | 82 | 256 | 434 | 77 | 349 |240 |1,920| +=====+=========+======+=======+=====+=====+======+=====+====+=====+ ----+-------------+---------------+-----------------------------+----------------------- | | | | | | | | | | | | | | | | | | | | | | | | No. | NAME of the | | | | VESSEL. | When | STATION. | REMARKS. | | commenced | | | | Running. | | ----+-------------+---------------+-----------------------------+----------------------- | | | | 1 | Bentinck |24 August, 1843| Calcutta & Suez. | 2 | Precursor |10 Sept. 1844| Ditto. |Purchased afloat. 3 |*Haddington | 4 Dec. 1846| Ditto. | 4 | Oriental | 2 Sept. 1840| Ditto. | 5 | India | .... | .... |Reserve ship, purchased | | | | in India. 6 | Achilles | .... | Bombay & China |Purchased by the 7 |*Pottinger |20 Sept. 1846| Ditto. | Company afloat; 8 |*Pekin |28 Jan. 1847| Ditto. | first voyage, 17th 9 | Lady M. Wood| 1 Feb. 1842| Ditto. | October, 1845 10 | Braganza | Sept. 1846| Ditto. | 11 |*Canton |not comd runng.| Hong Kong & Canton. | 12 | Hindostan |29 Sept. 1842|Southampton and | | | | Alexandria. | 13 |*Indus |20 June 1847| Ditto. | 14 |*Ripon |20 Nov. 1846| Ditto. | 15 |*Ariel |26 Sept. 1846| Malta & Alexandria. | 16 |*Erin | 3 Sept. 1846| Southampton, Constantinople,| | | | & Black Sea. | 17 |*Euxine | 3 Jan. 1848| Ditto. | 18 |*Sultan | 3 August 1847| Ditto. | 19 | Tagus |16 Nov. 1840|Southampton and | | | | Peninsula. | 20 |*Pacha |13 May 1843|Southampton & Italy. | 21 | Iberia |19 Sept. 1840| Ditto. | 22 | Jupiter | .... |Southampton and | | | | Peninsula. |Purchased afloat. 23 | Montrose | 5 Sept. 1840| Ditto. | Ditto. 24 |*Madrid |17 Nov. 1845| Ditto. | 25 |*Malta | | |Not yet running. 26 | Bombay | .... | .... | Ditto. 27 | Ganges | .... | .... | Ditto. 28 | Vestis | .... | .... |
The vessels marked * are built of iron.
_No. 3.--Statement of the Debts, Assets, and Effects of the Peninsular and Oriental Steam Navigation Company, 31st March, 1848._